Updated 01/21/2021: Valve responded to the European Commission’s allegations, saying that they did not agree with the Commission’s findings and the fine imposed on them. Read their full statement below. Original story from 20/01/2021.
Valve and a handful of game publishers have landed in hot water with the European Commission to block Steam geo-keys in certain regions of Europe. Steam owners, along with Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax (Bethesda’s parent company), were fined EUR 7.8 million (approximately GBP 6.9 million) for “breach of EU antitrust rules” .
“Valves and publishers have restricted cross-border sales of certain computer video games based on the geographical location of users in the European Economic Area (EEA), entering into so-called ‘geo-blocking’ practices,” the Commission said.
An investigation into Valve and the five publishers found that between 2010 and 2015 they had agreements to geographically block certain Steam keys, preventing them from being activated outside the Czech Republic, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania.
Geo-blocking is usually done so that games can be sold cheaper in low-income countries. However, people in higher-income countries have often found ways in the past to circumvent regional prices. Obviously, publishers are not a fan of this, because it means that those people charge lower prices.
Valve did not cooperate with the investigations and was fined 1,624,000 euros (approximately 1.4 million pounds). However, the publishers cooperated and their fines were slightly reduced. Even further, SnowRunner and publisher Greedfall Focus Home managed to accumulate a fine of 2,888,000 euros (approximately 2.6 million pounds).
A breakdown of fines.
“Today’s sanctions against Valve’s ‘geo-blocking’ practices and five PC video game publishers serve as a reminder that, under EU competition law, companies are prohibited from contractually restricting cross-border sales.” , said Commission Executive Vice-President Margrethe Vestage. , said.
“Such practices deprive European consumers of the benefits of the EU’s digital single market and the opportunity to look for the best offer in the EU.”
This is naughty, because the European Union’s digital single market is designed so that everyone living in the EU can buy and use things from all other EU countries.
Nor can this be the end, as the Commission states that “any person or company affected by anti-competitive conduct described in this case may bring the matter before the courts of the Member States and seek damages”.
Update: Last night, Valve issued a statement to Eurogamer claiming that they cooperated with the investigation and that they did not agree with the fine imposed on them:
During the seven-year investigation, Valve cooperated extensively with the European Commission (“EC”), providing evidence and information upon request. However, Valve refused to admit that it had broken the law, as required by the EC. Valve disagrees with the EC findings and the fine imposed on Valve.
“EC fees do not apply to the sale of computer games on Steam – the Valve computer game service. Instead, the EC claims that Valve activated the geographical lock by providing Steam activation keys and – at the request of the publishers – blocking these keys in certain territories (“region locks”) in the EEA. Such keys allow a customer to activate and play a game on Steam when the user has purchased it from a third-party distributor. Valve offers free Steam activation keys and does not receive any share of the purchase price when a game is sold by third-party resellers (such as a retailer or other online store).
“The blockades of the region applied only to a small number of game titles. About 3% of all games that used Steam (and none of Valve’s own games) at the time were subject to blockchain of contested regions in the EEA. Valve considers that the extension of the EC’s liability to a platform provider in these circumstances is not supported by the applicable law. However, due to EC concerns, Valve has effectively stopped EEA regional blockades since 2015, unless these regional blockages were necessary for local legal requirements (such as German content laws) or geographical boundaries of where your Steam partner is authorized to distribute a game. Removing regional locks can also cause publishers to raise prices in less affluent regions to avoid price arbitrage. There are no costs involved in sending activation keys from one country to another, and the activation key is all a user needs to activate and play a game on a PC. ”